16 May 2019

FLOW: Forensics, technology and the future of legal services 04: Vendor Due Diligence

Contracts are at the core of legal relationships, so getting them right is crucial. But that can take a lot of work, so anything that can reduce the time it takes will be a godsend to lawyers and our clients. We have developed a bespoke tool through our Relativity platform which help our lawyers review contracts more efficiently, thus improving turnaround time and saving our clients' money.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.

Transcript

Contracts are the core of any legal transaction and this is particularly true for real estate transactions which often involve a number of documents which need to be reviewed in a short period of time.  The due diligence phase of a transaction helps you to identify all the risks in that transaction in order to determine and advise a client on whether to proceed.  Where we have a significant number of leases we often have to do 200 or 300 reviews of those leases in a short period of time.  Anything we can do to develop tools in particular using AI and relatively to review those leases in a much more compressed timeframe in order to identify the issues is of huge benefit to our clients. 

Using our relativity platform we've developed tools to conduct due diligence within the FTS team which gives the information to our lawyers to advise on complex real estate transactions in a much more efficient manner.  It also helps generate the outputs from those reviews in many different forms that can be used to deliver information to clients and search information for any future legal reviews that are required. 

We utilise an artificial intelligence based contract review tool that identifies key sections of a contract and helps the lawyers identify and extract crucial information quickly.  Our automated document generation minimises the amount of time spent by our lawyers copying and pasting or retyping sections of the contract into templates.  With the interactive dashboard clients can get a summary of all the contracts that were analysed as part of the due diligence and get insights such as contract term lengths and values of contracts over time.  All dashboards and visualisations can be configured depending on the information that the client requires. 

The tool would also be a repository of all contracts and documentation that have been reviewed and can be accessed by clients at any time.  Contracts in the repository can be searched to locate key information in those documents using an artificial intelligence review tool and the more this tool is used the more the artificial intelligence tools improve and we expect to see even greater efficiencies in real estate due diligence from them. 

Relativity has been developed by Clayton Utz in order to help us to deliver on those due diligence offerings in a much more efficient and time effective way.  Prior to relativity we looked at other off the shelf products to use but found that they were developed overseas and as a result of that didn't really pick up on the language that we used in drafting leases in Australia in a way that meant that we could easily use them to run AI due diligence processes.  The real benefit of developing Relativity has meant that when we have the information we need we can use it to do presentations to clients, the clients can use our platform to access that information, can search within those platforms to ensure that they can get the information they need in real time which means that they're happy and things are delivered in a much more efficient way.  From a legal perspective it means that we then analyse the information we need and feel like we truly add value in determining where risks are and how we might resolve how to deal with those risks in advising a client on a large transaction.